The Current Yield Tends to Overstate a Bond's Total Return

question 63

Multiple Choice

The current yield tends to overstate a bond's total return when the bond sells for a premium because:

• A)The bond's price will decline each year
• B)Coupon payments can change at any time
• C)Bonds selling for a premium have low default risk
• D)Taxes must be paid on the current yield

---

Definitions:

Homosexual Behavior

Sexual activity between individuals of the same sex.

Animal Species

A group of animals that share common characteristics and can breed with each other to produce fertile offspring.

Bargaining Chip

An asset or advantage held by one party that can be used to negotiate or influence outcomes in negotiations.

Financially Dependent

A state in which an individual relies on another person or entity for financial support to meet their living expenses.